The administrative building at the vacant WestHELP Complex in Greenburgh. / David McKay Wilson/The Journal News

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Ferncliff Manor on Cochrane Terrace in Yonkers, just east of Stew Leonard's. ( David McKay Wilson/The Journal News )

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The state has rejected Ferncliff Manor’s proposal to raze 108 affordable apartments at WestHELP Greenburgh to make way for its residential school for the developmentally disabled.

The rejection came in a Friday letter to Ferncliff Executive Director William Saich from the state Office of Children & Family Services.

State approval was needed for the project to proceed.

“Based on an analysis of the fiscal information available to OCFS, the agency is not sufficiently positioned to assume a project of this fiscal magnitude in a successful manner,” the letter said.

The $20 million project would be so costly that the resulting rate to house the students would exceed state limits. The letter cited the high costs for Ferncliff administration, lease payments for the six-acre site and demolition of the 108 efficiency apartments.

The Cuomo administration also was concerned about razing the apartments, which were built by Andrew Cuomo, then a young housing advocate, in 1990 in a deal he forged with Westchester County and Greenburgh.

“The use of the site as advanced in Ferncliff’s application would cause affordable housing stock to be removed from potential future use, and as a matter of public policy, this is a concern,” the letter said.

Saich and his wife, Patricia, said they were “shocked and disappointed” by the state action, saying they’d worked with the agency since 2011 and were unaware of the state’s concerns.

They said OCFS’ stance conflicted with what they were told by the state Education Department, which reviewed Ferncliff’s school proposal.

“The position of OCFS seems to run counter to that of the state Department of Education, which as recently as two weeks ago indicated our proposal is in line with acceptable cost formulas,” they said in a statement.

Greenburgh Supervisor Paul Feiner said the town would move expeditiously to select an affordable-housing provider to renovate and rent the apartments. He wants to select a developer Tuesday.

“I’m disappointed that Ferncliff’s plan was rejected, but now we will do the affordable housing,” he said. “I want to move on it immediately.”

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Edgemont civic leader Robert Bernstein said the town needs to resume getting income from the apartments, which it has left empty since October 2011.

County Legislator Catherine Borgia, D-Ossining, meanwhile, said she would help Ferncliff find another Westchester site while Greenburgh fulfills its obligation to rent the WestHELP apartments.

“Greenburgh needs to rent it out for housing,” she said.

The state rejected a plan promoted by Republican Westchester County Executive Rob Astorino, Greenburgh’s Democratic-led Town Board and a majority of the county Board of Legislators.

Astorino’s chief adviser, Ned McCormack, called on Cuomo to reverse his agency’s decision.

“We are surprised and deeply saddened that state bureaucrats have taken a position that hurts some of our most needy and disabled children, their parents and the dedicated workers who care for them,” he said. “We ask Gov. Cuomo to intervene to get this decision reversed.”

Cuomo, now New York’s governor, played a central role in the late-1980s battle to build the complex to house the homeless through the organization he helped found, called HELP USA. It was one of Westchester’s epic battles over race and class, with Greenburgh’s Mayfair-Knollwood neighborhood attempting to form its own village and the local NAACP branch going to federal court to stop it.

To win the neighborhood’s support, Greenburgh received $1.2 million a year for 10 years, with $650,000 each year earmarked for the Valhalla school district. The school-district payments were later found to be illegal, and the district agreed to return $1.8 million.

According to the 40-year agreement, Cuomo’s organization would house the homeless for a decade, with the apartments then turned over to Greenburgh to rent to low- and moderate-income tenants for the ensuing 30 years.

WestHELP won a second 10-year lease, which expired in September 2011.

The deal stated that Greenburgh had control of the apartments for an additional 20 years, as long as it kept as them as affordable housing. But Feiner instead had the town seek proposals to redevelop the site. Yonkers-based Ferncliff Manor, which has been looking for a new site, responded.

Ferncliff operates in an outdated former tuberculosis hospital and temporary trailers.

The state has urged the corporation to find a new site.

The Ferncliff plan, promoted by former state Sen. Nick Spano’s lobbying firm, won support from the Greenburgh Town Board and the Astorino administration, which proposed a 50-year lease for Ferncliff.

Five affordable-housing developers submitted proposals to rent the apartments, but the Town Board wanted Ferncliff, citing its pledge to give the town $500,000 a year in rent.